The US and the Iraqi government have overstated the number of foreign fighters in Iraq, "feeding the myth" that they are the backbone of the insurgency, an American thinktank says in a new report.

Foreign militants - mainly from Algeria, Syria, Yemen, Sudan, Egypt and Saudi Arabia - account for less than 10% of the estimated 30,000 insurgents, according to the Washington-based Centre for Strategic and International Studies (CSIS).

The report came as President Bush said a pullout of US forces would embolden America's enemies, allowing the Jordanian-born terrorist Abu Musab al-Zarqawi and Osama bin Laden "to dominate the Middle East and launch more attacks on America and other free nations".

The report says the presence of foreign fighters is cause for alarm "particularly because they play so large a role in the most violent bombings and in the efforts to provoke a major and intense civil war". The CSIS disputes reports that Saudis account for most of the foreign insurgents and says best estimates suggest Algerians are the largest group (20%), followed by Syrians (18%), Yemenis (17%), Sudanese (15%), Egyptians (13%), Saudis (12%) and those from other states (5%). British intelligence estimate the number of British jihadists at about 100.

The CSIS report says: "The vast majority of Saudi militants who have entered Iraq were not terrorist sympathisers before the war; and were radicalised almost exclusively by the coalition invasion."

The average age of the Saudis was 17-25 and they were generally middle-class with jobs, though they usually had connections with the most prominent conservative tribes. "Most of the Saudi militants were motivated by revulsion at the idea of an Arab land being occupied by a non-Arab country. These feelings are intensified by the images of the occupation they see on television and the internet ... the catalyst most often cited [in interrogations] is Abu Ghraib, though images from Guantánamo bay also feed into the pathology."

In terms of fighters entering Iraq, Syria is clearly the biggest problem, the report says, but preventing militants from crossing its 380-mile frontier with Iraq is daunting. "Even if Syria had the political will to completely and forcefully seal its border, it lacks sufficient resources to do so." Oil-rich Saudi Arabia, on the other hand, has spent $1.2bn (£670m) over the past two years and deployed 35,000 troops in an effort to secure its border.

During the past six months this has led to the capture of 63 Saudis trying to cross into Iraq but also 682 Iraqi intruders and smugglers. The smuggling included explosives destined for Islamist groups in Saudi Arabia and neighbouring countries.